Cheney electrical rates to go up May 1

For the first time in 14 years, Cheney residents will likely see an increase in the rate they are charged to consume electricity.

At its last meeting in March on Tuesday night, the Cheney City Council unanimously approved a 6 percent increase in the electrical usage rate for both residential and commercial. The rate is scheduled to take effect May 1 to allow for public comment.

Light Department Director Joe Noland told the council the last rate increase took place in 2001. Since then the city’s revenues from electrical sales have not kept pace with what spends to purchase power, particularly over the past six years.

In 2009, the city saw just over $7.7 million in electrical sales revenue, while in 2014 that figure was just shy of $8.09 million, an increase of not quite 4.9 percent. By comparison, Cheney had electrical expenses of $7.1 million in 2009, but $8.64 million in 2014, an increase of nearly 18 percent.

During the recent recession the city elected to hold it’s electrical rates steady to help residents’ pocketbooks. It used money from its Light Department reserve account to make up deficits between revenues and expenses, along with making some large, but needed purchases of electrical equipment.

Noland said without an increase, by 2017 the city would be “scrapping the bottom of the barrel” with its electrical reserves.

“In 2018, we’d be (in a) deficit,” he said. “That’s with no increase in the immediate future.”

Without any changes, Cheney residential electrical customers would see an average monthly increase with the new rates of $3.20 per kilowatt hour (kWh) of usage. By comparison, Noland said residential electrical usage has averaged around 890 kWh per month.

The resolution passed by council raises residential rates from 5.32 cents per kWh to 5.64 cents. Commercial users will see their rates rise from 5.81 cents to 6.16 cents per kWh for up to 15,000 kWh per month, while those who use above 15,000 kWh will realize a bump from 3.45 cents to 3.66 cents per kWh.

Noland reminded the council that the increase was a charge on consumption. Electrical customers can reduce their increases through a variety of energy efficiency methods.

“This is something you have control over,” Noland said.

Noland said there are more increases projected sometime in the future, but right now the city would let this increase take hold and reevaluate it later to see if it meets the needs of replenishing the reserve account. Councilwoman Jill Weiszmann felt the approved increase was too conservative, preferring not to see “so much red” in the financial charts, but understood the need to go slow.

Councilman John Taves said he understood this was a conservative approach, but the city had seen “substantial erosion” of its electrical financial reserve capacity over the years. The approved increase he believed would address restoration of those reserves.

“I think this gradually does that and I’m glad to see it,” Taves said.

Even with the increase, Noland and several council members said Cheney still has some of the cheapest electrical rates in the region, including comparisons with utilities such as Avista, Inland Power and Light and Kootenai Electric.

The council also awarded several contracts at its Tuesday meeting. They awarded a contract for 30 wooden power poles, ranging from 25 feet to 55 feet, for $22,973.75 to LD McFarland Company. The poles are part of the Light Department’s ongoing pole replacement project, and Noland said the price is very close to what the city paid last year.

“These look a lot cheaper than what Avista says they have to pay,” Mayor Tom Trulove said.

Council also approved a $44,505.25 contract with Five Star Concrete, Inc. to remove and replace approximately 7,900 square feet of sidewalk and 215 lineal feet of curb in 20 locations throughout the city.

“We have some bad sidewalks out there and we need to catch up,” Public Works Director Todd Ableman said.

John McCallum can be reached at [email protected].